MENU

Will Pura Vida Energy NL strike it rich?

The Spanish phrase pura vida or pure life is popular slang in Costa Rica to mean ‘everything’s cool’, although investors at the eponymous company Pura Vida Energy NL (ASX: PVD) might not be feeling so cool this week after the company reported a major exploration miss.

The micro-cap oil explorer climbed 37.50% today, but is still down 37% over the last five days and around 53% year to date. The big falls after the business reported it had discovered no effective oil reservoirs at a depth of 4,653 metres at one of its ongoing exploration projects.

However, it’s all not bad news as the plan is to drill deeper and hopefully strike the black gold at two primary objective targets around 6,150 metres deep. The company expects to report the results of the renewed drilling effort shortly.

For investors though it’s worth noting that even the most experienced seismic geologists don’t know where reservoirs are at more than 6,000 metres deep into the earth’s crust. Other prospective oil explorers hoping to strike it rich include Africa-focused FAR Ltd (ASX: FAR) and more established operator Karoon Gas Australia Limited (ASX: KAR), which is exploring off the coast of Brazil.

Although it does seems likely that if Pura Vida has any future exploration hits then the share price will receive major support given the size of the prospects it’s targeting compared to its current market valuation around $18 million.

However, buying a stock like this is closer to gambling than investing and I’d prefer to go gambling at one of the casinos operated by the likes of Crown Resorts Limited (ASX: CWN).

While investing is best left to the experts at The Motley Fool who have uncovered 2 gangbusters growth small caps to buy now while they're still on attractive valuations...

And I'm not kidding either!

Click here now to be emailed a brand-new FREE report all about some of tomorrow's potentially big superstars...

Motley Fool contributor Tom Richardson has no position in any stocks mentioned.

You can find Tom on Twitter @tommyr345

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

HOT OFF THE PRESSES: My #1 Dividend Pick for 2017!

With its shares up 155% in just the last five years, this ‘under the radar’ consumer favourite is both a hot growth stock AND our expert’s #1 dividend pick for 2017. Now we’re pulling back the curtain for you... And all you have to do to discover the name, code and a full analysis is enter your email below!

Simply enter your email now to receive your copy of our brand-new FREE report, “The Motley Fool’s Top Dividend Stock for 2017.”

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.